Guest house and B&B owners have called for a controversial licencing scheme for short term lets to be delayed for a year to defuse a “ticking time bomb” in the sector.
Industry leaders say it faces closures or businesses operating “illegally” due to the need to apply for a licence by October 1.
At the same time, B&B and guest house owners are struggling to sell their businesses as going concerns because of the new legislation.
They also warn councils could be overwhelmed by last minute applications ahead of the deadline.
Many leaving the industry
The Scottish Government legislation requires local authorities to set up a licensing scheme for STLs.
New operators – those not in business before October 2022 – cannot accept bookings or guests until they get a licence.
Existing providers can continue to operate after October 1 if they have been granted a licence or have submitted an application.
Recent figures from Highland Council show just over 2,000 of the estimated 10,000 operators in the region have submitted applications and only 1,000 licences have been issued.
Critics say the cost and hassle of applying means many are leaving the industry.
It is also claimed selling B&Bs or guest house has become a problem as potential buyers may not get mortgages unless they have a STL licence.
Gordon Bulloch and his wife gave up running their successful B&B in Grantown due in part to the STL legislation.
“It certainly precipitated it at the time. And from what I gather a lot of people are saying ‘why am doing this?’
“It’s yet more money, more hassle filling in forms and going through hoops. People are just giving up.”
Mr Bulloch, who is still a member of the Scottish Guest House and B&B Alliance, said owners are in a “Catch 22” situation.
“If they try to sell, potential buyers seeking a mortgage are a risk as they can’t operate without a licence.”
“I’m not aware of one B&B or guest house in Scotland that has managed to complete a sale when it’s being sold as a going concern where a mortgage is required.”
Call for registration instead of licensing
The Scottish Bed and Breakfast Association is calling for a one-year pause in the scheme because of the uncertainty.
Chairman David Weston said: “We feel the sector is being ignored. There is a ticking time-bomb effectively coming on October 1.
“The number of applications is low relative to the number of short term lets. The number of licence passed in relatively low.
“The big thing is that the vast number have not even applied yet. We are worried about what happens on October 1.”
The association has urged the Scottish Government to consider a low-cost accommodation registration scheme instead of a licensing system.
Mr Weston said: “At the moment we are all being hit by this costly and time-consuming scheme.
“We’re hearing from members this is the final straw and they will give up and not trade next year.
David Weston has called for the scheme to be paused“We are informing our members about applying for a licence. But others who are not members of an organisation may not even know about this.
“A lot of people are waiting because they think it will be paused because there have been so many problems.
“We could get many thousands of people who will be trading illegally (after the deadline), even if many of them will be doing what they’ve been doing for 10 years.
“Lots of them will also be applying at the last minute and local authorities are under pressure.”
He said the issues around selling and buying B&B have “not been thought through”.
“Lots of sales have been frozen of fallen through because there isn’t a way of changing a name of a licence.
Raising awareness
“What was a B&B can only be sold by closing down and selling it as a house, but that’s a number of rooms lost to Scottish tourism and there may not be much more accommodation in the area.”
Highland Council says it has undertaken extensive engagement to raise awareness of the legislation and has guidance online.
“We will continue such engagement and will attend a number of events planned in the lead up to 1 October 2023.
The Scottish Government said many short term let hosts have already obtained licences.
“Hosts can contact the council where their accommodation is located to obtain more information about how to apply for a licence.
“Prospective purchasers of a property can still apply for a short-term let licence, so long as they have the consent of the current property owner.”